Reacting to that decision, leading organizations representing biofuel producers -- who had intervened in the litigation to defend the rulemaking -- noted that although the court vacated the cellulosic standard, it also rejected American Petroleum Institute’s argument that the EPA was required to follow the U.S. Energy Information Administration’s projections in setting its own.

Similarly, the court rejected American Petroleum Institute’s argument that the EPA was not entitled to consider information from cellulosic biofuel producers in setting its projection. The court found that cellulosic producers were an, “almost inevitable source of information” for EPA.

According to the biofuel organizations, these were important decisions that give EPA flexibility in setting cellulosic biofuel volumes in the future.

Nonetheless, the court vacated the cellulosic biofuel standard because it believed that EPA had impermissibly set the volume with the objective of promoting growth in the industry, rather than simply making an accurate prediction. The biofuels organizations strongly disagree with the court’s characterization of what EPA did -- EPA did not determine a reasonably achievable volume and then inflate it. Rather, the EPA set the volume based on the best information available to it at the time.

Regardless, under the D.C. Circuit’s decision, EPA is free to reinstate the volumes that it had established, as long as the information available at the time would support the agency’s conclusion that those volumes were reasonably achievable. The court’s decision does not now require, or permit, EPA to set volumes based on hindsight.

The D.C. Circuit also affirmed the EPA’s decision not to reduce the advanced biofuel volume, categorically rejecting American Petroleum Institute’s arguments that EPA must be support its decision not to reduce the applicable volume of advanced biofuels with specific numerical projections.

In a joint statement, the biofuel organization stated that “although we disagree with the court’s decision vacating the 2012 cellulosic volumes, today’s decision once again rejects broad-brushed attempts to effectively roll back the federal Renewable Fuel Standard.”

The intervener biofuel organizations are reviewing the court’s decision and assessing next steps in the matter.